mcom441spring2016fandomcom-20200214-history
Group 03 - Mobile Gaming and Economics (Complete Friday, February 5)
Mobile Gaming & Economics What is mobile gaming? Defined by Techopidia, mobile gaming is "games designed for mobile devices, such as smartphones, feature phones, pocket PCs, personal digital assistants (PDA), tablet PCs and portable media players." Today mobile game players can play their favorite game using: 3G, WiFi or even Bluetooth. Based on the application, mobile games can have single and multiplayer functionality. In 1994, the first mobile game was installed onto phones, Tetris. Followed by Snake in 1997 from Nokia. Today, Snake and similar applications have been the most popular mobile game and have been downloaded on over 350 million devices worldwide. Growth & Economics of Mobile Gaming Growth: According to Marketing Week, mobile devices are now the fastest-growing gaming platform. Even with the likes of Tetris and Snake being around since the 1990s, mobile gaming has beaten it's platform competition in surprising numbers. Time spent on mobile gaming, according to Marketing Weekly, has risen 30 percent in the last year alone, while time spent on mobile games has risen 43 percent in conjunction. Flappy Bird, Candy Crush, and Clash of Clans have all become well-known titles, with Clash of Clans even having it's own commercials on multiple television networks. The growth of smartphones and tablets has been the direct cause of the rise of moblie gaming. Economics: When studying the Economics on mobile gaming, one needs to look upon one of the most well-known titles in the world: Angry Birds. According to Bernhard Warner of Business Week, Angry Birds' creator Rovio made its money by pushing tons of ads to free players, while simultaneously charging users and extra $1-2 for an ad-free version. Allowing the users to have the choice for ads or not, while also making money from either advertisers or their consumers, the game Angry Birds was launched into the social scene, prompting toys, spin-off games, and even a feature film. Marketing of Mobile Gaming There are two main ways consumers download an app. First, they find an app/game by browsing the App Store or Google Play. Second, they are recommended to download an app/game by a friend or their family. For a mobile game developer, they need to understand the search algorithms put in place by Apple and Google. Although Apple and Google don't disclose their algorithms, app marketers suggest the biggest factors that impact a consumers search results are the following: title, keywords, rating value and numbers, as well as downloads over time. So if a game developer decides he wants to create a war game, they'll have a lot of competition, so they will need to try to figure out the algorithm to show up when a consumer searches the App Store or Google Play. With almost every market, there are trends. Here are some trends that mobile game marketers are seeing. Amazon recently came out with Amazon Underground. An app, only for Android devices at this point, that allows subscribers thousands of apps, games, and even in-app items for free. Many developers are watching this to see if it will catch on. Permission marketing is giving a consumer value, in exchange, you get permission to market to them. This helps create a relationship with the consumer, while you receive permission to rake in more money. Another trend in mobile gaming is that companies are turning away from cost per install (CPI) in favor of cost per engagement (CPE). The numbers will look more tantalizing to advertisers if your app has 50,000 players that open the app everyday, with 100,000 total downloads, compared to an app that has 25,000 players that open the app, but the same number of total downloads. More people playing the game regularly equals more money brought in from advertisements. Premium & Freemium Applications Premium Mobile Games: A premium game is an app store game sold at a price point. Depending on the app store that the game is being sold through, the app developer typically takes 70% and the store 30%. Typically the "premium" apps are often less downloaded than the "freemium" apps. In order to increase the amount of downloads, it would be beneficial for Premium Mobile games to make the application free for one day. This is not limited but it will allow the mobile application to promote itself and then more paid downloads will occur. One positive to premium applications is that they do not feature banner advertisements along the bottom of the screen. Will Stallwood, owner of Cipher Prime creator of Auditorium, Fractal, and Splice, focuses on premium mobile games. Stallwood states that his friends companies that deal with freemium gaming have lower amount of sales that Cipher Prime does. So is the creation of premium mobile games worth it? Stallwood states that "at the end of the day we aren't making games as services, we are creating experiences. And we feel that an ad gets in the way." Freemium Mobile Games: A freemium application is an app store game that is free of charge to consumers. The application typically will have banner advertisements as well as microtransactions or more commonly known as in-app purchases. Banner advertisements are paid advertisements that vary in rate depending on whether the consumer sees, clicks or even installs the featured app. This is called, Cost-per-Impression, Cost-per-Click and Cost-per-Install. This is popular among advertisers because it is easy for developers to insert them into the game. Typically the ads appear between levels or even during a pause in the game. In-app purchases or microtransactions are the biggest form of revenue for freemium game developers. Some examples of these would be level-ups in Candy Crush Saga, avatar hats in FarmVille or even upgrades in Jetpack Joyride. These microtransactions are easy for consumers to advance in a game and even customize their game to their liking. These two are tactics used by developers for freemium applications in order to make a profit. Developers understand that the margin of profit is typically smaller than those of premium apps. In order to insure they will still make money, the developers pay attention to the Average Revenue Per User (ARPU). This allows developers to monitor the spending of each customer on a monthly/weekly basis. Also See Amazon Underground Average Revenue Per User (ARPU) Banner advertisements Bluetooth Candy Crush Saga Consumer Cost-per-Click Cost-per-Impression Cost-per-Install Developer FarmVille Feature Phone Freemium Jetpack Joyride Personal Digital Assistant Pocket PC's Portable Media Player Premium Price Point Smartphone Tablet PC's WiFi Will Stallwood 3G References Amy Cassell. "Premium vs. Freemium: How Mobile Games Make Money." Full Sail University. http://www.fullsailblog.com/premium-vs-freemium-how-mobile-games-make-money/ Justin Carroll. "10 Mobile Game Marketing Trends For 2016." Monastery. http://www.monastery.io/digital-marketing/10-mobile-game-marketing-trends-for-2016/ Mashable. "Mobile Games." http://mashable.com/category/mobile-games/ Mobile plays lead role in growth of gaming. (2012). Marketing Week, 35(27), 20. Morten Grauballe. "The Science of Mobile Gaming." Developer Economics. http://www.developereconomics.com/the-science-of-mobile-game-marketing/ Simon Sage. "Freemium Rising: Mobile Game Developers on the "Freemium" Trend." iMore. http://www.imore.com/freemium-rising-mobile-game-developers-on-the-freemium-trend Techopedia. "Mobile Games." https://www.techopedia.com/definition/24261/mobile-games Warner, B. (2013). Mobile Games With Megaprofits. Business Week, (4328), 34-35.